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Will Germany be the first country to abandon its net-zero emissions commitment?

2023-09-18

In recent months, the German government has been trying to find other ways to save its heavy industry from high energy prices, which have hindered Germany's progress in achieving its goal of achieving net zero emissions by 2045.

High energy prices are causing production to shift to Asia. For example, last year, chemical giant BASF announced it would invest £10 billion in a new plant in China due to energy costs. In response, the German government will launch a £200 billion Climate Transition Fund to invest in green technologies and subsidize projects affected by policies such as the ban on new gas boilers next year.

However, some of these power plants have had to restart in response to reduced Russian natural gas supplies, allowing some coal-fired plants to receive subsidies. Meanwhile, Germany is opposing EU proposals on climate and other environmental requirements. The German automotive industry has successfully mitigated the EU's ban on gasoline and diesel vehicles from 2035 by allowing internal combustion engines to use synthetic "e-fuels" made from hydrogen and carbon dioxide.

How did Germany, Europe's most ambitious nation on net-zero emissions, become a laggard? For years, Germany relied heavily on cheap Russian natural gas and its renewable energy solutions. Despite the impact of the Russo-Ukrainian war, Germany shut down three nuclear power plants early in 2021. However, with energy prices currently high and wind and solar power unable to provide sufficiently cheap and reliable energy to replace all fossil fuels, the inevitable result is the relocation of more and more German industrial capacity to South Asia.

Source: The Spectator

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